An Investigation of Pensioner Employment

Published:27 Jun 2016

ISBN:

9781786523440

The report explores the drivers behind the consistent increase in pensioner employment over the past decade, including throughout the last recession. It discusses the employment characteristics and socio-economic conditions of pensioners who continue to w

Contents

Discussion And Conclusions

This paper investigated current trends in pensioner employment
in Scotland and identified an increasing trend in numbers of people
continuing to work past pension age. In 2015, 49,200 male and
30,800 female workers were over the age of 65.

The main employment characteristics of working pensioners
are:

Working pensioners are mostly employees but they are more
likely than any other age group to be self-employed

The number of overemployed people aged 65+ has grown
considerably over the past decade

Looking at employment rates by broad occupation group, the
largest growth in numbers has occurred in medium -high and low
skilled occupation groups

However, female pensioners work considerably more in
medium-low and low skilled occupations, such as elementary and
caring, leisure and other service occupations, than male
pensioners. This finding reflects the widening gender pay gap in
older age groups

More women than men have caring responsibilities across all
age groups with the exception of the over 75s

Based on this analysis, observations on the economic and social
conditions are:

The proportion of income from earnings is significantly lower
for pensioners at the lower end of income distribution

Many pensioners do not claim pension credit, mainly due to
perceived ineligibility and perceived stigma

Although underclaiming pension credit is unlikely to have a
negative impact on pensioners who wish to work, pension credit
would help improve the wellbeing of low income pensioners who
cannot work

Pensioner poverty has decreased more steeply than child and
working age adult poverty

Pensioners are now more likely to own a property outright
than they used to

Pensioners should reach the Minimum Income Standard more
easily compared to working age single people, lone parents and
couple parents

However, the
UK has among the lowest
gross pension wealth and the second largest pensions gap across
OECD
countries

The most significant barriers for working pensioners are:

Inequality of health outcomes

Discrimination against age

Skill depreciation that leads to restrained
employability

Limited training opportunities

Inflexibility to reduce or adjust working hours

It has been argued that an ageing population could slow economic
growth, lowering population labour market participation rates.
However, there are some indications that the increase in pensioner
employment has had a positive impact on economic growth as more
people contribute to output and a positive impact on public
finances as more people contribute to income tax receipts.

Next Steps

As can be seen from the key findings above, there are a range of
concerns about aspects of pensioner employment. It is therefore
proposed to explore these concerns in more detail in a second stage
of analysis, which will be taken forward in coming months.

Implications for policy

The challenges of supporting people to be able to continue to
work beyond pension age are similar to supporting older workers in
general - flexible working, reduced hours (each to help people
balance work with caring responsibilities), retraining, making
allowances for medical appointments,
etc. This requires working with
employers to help them understand the opportunities and benefits of
retaining/recruiting older workers and the ways of doing this that
avoid detriments to the employers activities.

In addition, the Scottish Government is providing other forms of
support on the following key issues, which are expected to improve
conditions for working pensioners:

1. Health conditions are likely to be a significant barrier
to work for pensioners who need additional income

The Scottish Centre for Healthy Working Lives already
provides advice to employers on supporting workers with health
conditions as well as how health and wellbeing can be supported
in the workplace.

Fit for Work Scotland offer support to workers who are at
risk of going off on long term sickness absence, which will
particularly benefit those more at risk such as older
workers.

2. High gender pay gaps for older age groups reduce work
incentives for those approaching retirement

The Scottish Government has a comprehensive range of policies
intended to help accelerate the long term decline of the pay gap
across all age groups though:

Transformative funding for quality affordable childcare

Initiatives to tackle pregnancy and maternity
discrimination

A commitment to achieve greater gender diversity on
Scotland's public, private and third sector boards

Working with partners to encourage flexible working, family
friendly workplaces

Encouraging employers to pay the Living Wage, which will
disproportionately benefit women who make up around 65% of
employees earning less than the Living Wage

Providing further investment to health and social care
partnerships to enable the Living Wage to be paid to care
workers, mainly women, supporting vulnerable adults.

Committing to establish an 'Advisory Council on Women and
Girls' to advise on tackling workplace and occupational
segregation and other issues relating to gender equality.

Committing to work with employers to pilot 'Returners'
scheme, which will bring experienced women back into their
previous career after a break.

Scottish Government analysts are planning further analytical
work on the gender pay gap to investigate what is driving a
persistent pay gap in over 50s.

3. Levels of investment in training opportunities for older
workers have been low for the past decade

Training and employment support has been focused on young people
since the recession as the rates of youth unemployment have been
higher than in the wider population and because of the negative
long-term impact unemployment at a young age can have on
individuals and the economy as a whole. However, the Scottish
Government recognises the importance and value of older workers to
Scotland's economy and has a range of policies intended to support
older people employability:

Continues to fund short courses that lead to work or career
progression.

Makes progress towards advancing older people's position in
the labour market and boosting training opportunities for this
group.

Continues to work closely with Skills Development Scotland (
SDS) who
offer an all age careers service within Scotland, providing older
workers with specific guidance and advice to get back into work
or providing costs towards learning and training opportunities
through Individual Learning Accounts.

Furthermore, the Scottish Government recognises that older
workers are an important cohort to consider in the design of new
employment services some of which will be devolved to Scotland from
the 1
st April 2017. The Scottish Government recognises the
particular support requirements of older workers, which might
include a focus on retraining and confidence building. The approach
the Scottish Government is taking for all customers accessing the
programme(s) will be person-centred and support plans will be
developed with them and tailored to their needs.

4. Working pensioners are more over-employed than
under-employed and therefore seek opportunities for more flexible
working

The Scottish Government recognises the importance of high
quality flexible options for working pensioners and is taking steps
to encourage and support employers to understand the needs of
working pensioners who have caring responsibilities, whether for
elderly relatives or grandchildren and provide working patterns
which suit those needs. In addition, the Scottish Government is an
active partner in the Family Friendly Working Scotland (
FFWS)
Partnership.

The
FFWS
Partnership has taken steps to highlight to employers the support
that working pensioners require, including:

Delivering a seminar for employers in April 2016 titled:
'Business futures: what do changing workforce demographics mean
for employers?' The event included a presentation from Dr Wendy
Loretto of the University of Edinburgh Business School on: 'Older
workers in the workplace'.

Working closely with Carers Scotland, who operate the Carer
Positive scheme. The scheme has been promoted to employers
regularly at employer events.

Delivering the annual Scottish Top Employers for Working
Families awards, celebrating organisations that demonstrate
excellent practice in relation to family friendly and flexible
working. In recognition of the importance of supporting carers,
including elderly carers, one of the award categories is the
'Carers Scotland Best for Carers and Eldercare'.

In light of demographic and employment trends, and the
associated needs for family friendly and flexible working options,
pensioner employment will remain a focus of work for the Family
Friendly Working Scotland Partnership.